There are plenty of myths about the tax rules on company cars and the Pool Car Policy, but you should believe them at your peril as getting it wrong could result in a costly investigation by HM Revenue & Customs. Here, A&C Chartered Accountants can let you know the facts about the Pool Car Policy.
So what is a Pool Car and what is the restriction.
Pool Cars must meet the following conditions:
HMRC:http://www.hmrc.gov.uk/payerti/exb/a-z/c/cars.htm
- Used by more than one employee
- Not ordinarily used by one employee to the exclusion of others
- Not normally kept at or near employees’ homes
- Used only for business journeys – private use is only permitted if it is merely incidental to a business journey (for example, commuting home with the car to allow an early start to a business journey the next morning)
- Provided all these conditions are met, you have:
- No reporting requirements
- No tax or NICs to pay
What to report, what to pay
Provided all these conditions are met, you have:
- No reporting requirements
- No tax or NICs to pay
Banning all private use is essential for you ‘pool car’ to be considered by the Tax man. If one of these conditions is not met let’s say that your the car/van is regularly kept at one of the employees homes, the car will be considered an not a pool car, and as a result private use of the car creates a tax liability. But tis tax liability will no only effect this particular employee but all the employees who use the car.
For Any more information regarding the issues raised in this article please do not hesitate to contact a member of the a&c Team. Call 0161 962 1855 or email chloe@ac-accounts.co.uk
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